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Middle Class Most Likely to See Benefit, Study Shows

Dec. 13, 2010 -- Increasing taxes on sweetened drinks, such as soda, could lead to modest weight loss at best, particularly among middle-income families, and could generate between $1.5 billion and $2.5 billion in annual revenue, according to a study.

Researchers led by Eric Finkelstein, PhD, associate professor of health services at Duke University Medical Center-National University of Singapore, found that a 20% tax on sugary drinks would result in weight loss of about 0.7 pounds per person over the course of a year and generate approximately $1.5 billion in tax revenue; a 40% hike in would lead to an average weight loss of 1.3 pounds per person per year and result in $2.5 billion in tax revenue, and cost the average household about $28 per year.

The findings, based on 2006 data and published in the Dec. 13/27 issue of Archives of Internal Medicine, support the argument for increasing the taxes of sugar-sweetened drinks as a means to help curb the obesity epidemic. The study was supported by the Robert Wood Johnson Foundation.

"Although small, given the rising trend in obesity rates, especially among youth, any strategy that shows even modest weight loss should be considered," Finkelstein says in a prepared statement. "Extending the tax to restaurants and vending machines would generate more tax revenue and perhaps greater weight losses."

Lower and Upper Income Families Less Affected

Although Finkelstein and his team found a so-called “soda tax” could lead to modest weight loss, their analysis showed that middle-income households were the most likely to feel the impact of the soda tax and to experience weight loss, whereas lower- and higher-income households would probably not experience as much weight loss. The findings are limited by the fact that the analysis only included beverages purchased in stores.

"Higher-income groups can afford to pay the tax so they are unaffected, and lower-income groups likely avoid the effects of the tax by purchasing generic versions, waiting for sales, buying in bulk, or by other cost-saving strategies," Finkelstein said. Moreover, "If they switch to other high-calorie drinks, the effects of the tax would be diluted."

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